Released August 01, 2012 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The U.K.'s largest coal-fired power plant, Drax Power Station, is in line for a green makeover following a decision by its owner to invest in converting half of its coal-fired units for burning biomass.
The move follows the U.K. government's recent publication of new subsidy levels for renewable energy. Despite the biomass subsidy - or Renewables Obligation Certificates (ROCs) - being reduced to 1 ROC per megawatt hour (MWh) for units converted to burn biomass, Drax Group plc (LSE:DRX) (Selby, England) said it still plans to invest up to 893 million ($1.1 billion) to carry out the conversions. The Drax coal-fired plant in Selby, north Yorkshire, has a total generating capacity of 4,000 MW and is the largest CO2 emitter in the U.K. For additional information, see related July 30, 2012, article - U.K. Predicts 32 Billion Renewables Boom.
Drax has committed to a future based largely on biomass-based energy, a combination of converting its coal-fired plant to biomass and building standalone biomass plants. It was relying on a larger subsidy for biomass and when the government announced the new lower ROC, nervous investors slashed 25% from the company's share value.
"This is good news for Drax," argued chief executive, Dorothy Thompson, speaking to the press. "At 1 ROC it provides the necessary support we need to transform Drax into a predominantly biomass-fuelled generator. We are confident that this works for us. This transformation will be achieved through major capital investments at Drax and across the supply chain, securing significant numbers of jobs, primarily in the North East. We remain keen to contribute fully to the U.K.'s renewables and carbon reduction targets by producing low cost, reliable and flexible renewable electricity."
To make the new biomass units work, Drax will need around eight million tonnes of biomass fuel annually to replace the five million tonnes of coal the existing units currently burn. The company wants to eventually convert all six units to biomass.
Thompson said the main challenge will be getting the supply chain in place to get the biomass to the Drax plant but claimed that there will be enough biomass to run the new units. "We've got eight years' biomass experience. There's no question that there's enough biomass. The technical and sourcing challenge to successfully achieve this is not insignificant. It's not wide open because it requires a lot of work, expertise and a significant amount of investment."
The Drax power station is already in the process of being cleaned up. Earlier this year, the company finished a 125 million ($160.6 million) steam turbine upgrade that will help cut its CO2 emissions by an additional one million tons a year. The project, the largest steam turbine modernisation program in U.K. history, involved Siemens Energy, part of German engineering firm, Siemens (NYSE:SI) (Munich, Germany), modernising all six units at the power station. For additional information, see related May 12, 2012, article - U.K. Drax Coal-fired Plant Cleans up Act.
View Plant Profile - 1073074
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The move follows the U.K. government's recent publication of new subsidy levels for renewable energy. Despite the biomass subsidy - or Renewables Obligation Certificates (ROCs) - being reduced to 1 ROC per megawatt hour (MWh) for units converted to burn biomass, Drax Group plc (LSE:DRX) (Selby, England) said it still plans to invest up to 893 million ($1.1 billion) to carry out the conversions. The Drax coal-fired plant in Selby, north Yorkshire, has a total generating capacity of 4,000 MW and is the largest CO2 emitter in the U.K. For additional information, see related July 30, 2012, article - U.K. Predicts 32 Billion Renewables Boom.
Drax has committed to a future based largely on biomass-based energy, a combination of converting its coal-fired plant to biomass and building standalone biomass plants. It was relying on a larger subsidy for biomass and when the government announced the new lower ROC, nervous investors slashed 25% from the company's share value.
"This is good news for Drax," argued chief executive, Dorothy Thompson, speaking to the press. "At 1 ROC it provides the necessary support we need to transform Drax into a predominantly biomass-fuelled generator. We are confident that this works for us. This transformation will be achieved through major capital investments at Drax and across the supply chain, securing significant numbers of jobs, primarily in the North East. We remain keen to contribute fully to the U.K.'s renewables and carbon reduction targets by producing low cost, reliable and flexible renewable electricity."
To make the new biomass units work, Drax will need around eight million tonnes of biomass fuel annually to replace the five million tonnes of coal the existing units currently burn. The company wants to eventually convert all six units to biomass.
Thompson said the main challenge will be getting the supply chain in place to get the biomass to the Drax plant but claimed that there will be enough biomass to run the new units. "We've got eight years' biomass experience. There's no question that there's enough biomass. The technical and sourcing challenge to successfully achieve this is not insignificant. It's not wide open because it requires a lot of work, expertise and a significant amount of investment."
The Drax power station is already in the process of being cleaned up. Earlier this year, the company finished a 125 million ($160.6 million) steam turbine upgrade that will help cut its CO2 emissions by an additional one million tons a year. The project, the largest steam turbine modernisation program in U.K. history, involved Siemens Energy, part of German engineering firm, Siemens (NYSE:SI) (Munich, Germany), modernising all six units at the power station. For additional information, see related May 12, 2012, article - U.K. Drax Coal-fired Plant Cleans up Act.
View Plant Profile - 1073074
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
